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On-the-move

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Click here for “Think OutSideIn Supply Chain”… Let’s go! 

 

 

 

 

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Of course they are behind you 100%. How else will they know where to stick the knife?

Stab

I present to you, the passive-aggressive stakeholder. Sneaky in their approach, publicly supportive and privately destructive. As one of my colleagues recently put it… “passive-aggressives instantly breathe life into an initiative with their strident support and then kill it slowly with a thousand cuts of veto.”

The anthropological evidence of organizationally passive-aggressive behavior in specific colleagues presents itself in the behaviors that they exhibit when although friendly to your face and will demonstrate agreement when you make a suggestion, at times they even raise their voice in agreement. But when the meeting is adjourned they will inevitably send out an e-mail shooting down the idea with a strategically developed “CC” distribution list attached. If you have a call to action that is distributed electronically they will likely just pocket-veto the project by withholding their response until it is too late for preemptive course correction, forcing you to start over.  

Does that sound familiar? Passive-aggressive stakeholders are disruptive to the healthy course of challenging the status quo and assembling our best process improvements with any hope of exploiting the benefit of speed-to-market.

Here is how to deal with the passive-aggressive stakeholder.

Recognize the passive-aggressive stakeholder for who they are. You may have considered them a supporter at first, then you begin to witness their stealth and guile as they start to dismantle your campaign or initiative from the inside-out.

Constrict membership to your tribe. You don’t have a tribe of stakeholders with a shared interest without some level of restriction. Global inclusiveness will simply invite the purveyors of passive-aggressive tactics to join early, and reap their insidious brand of havoc from the foundation of your initiative. Once the tribe is formed take an extra step to further constrict the group around those who are most likely to challenge the status quo and least likely to settle for anything short of an excellent result.

Mitigate your risks. You still might not catch the potential practitioner of passive-aggression early enough and they knit themselves into the fabric of a team of stakeholders. This disruption is a significant risk to the success of a new program or initiative that you need to take basic counter measures from the beginning, even when you have tried to proactively lower your risk by managing inclusiveness. From the launch of your campaign stay focused and clear in communication. Document decisions and agreements with written follow-up to all stakeholders in a “as I remember it” or “to memorialize our agreement” memo or e-mail. You can certainly give space for a reply including any realty-check edits just to take advantage of the better memory of salient point from the collective group, but you want to keep the group on the same page from the beginning. This is not to be presented as a CYA tactic, but it will work to keep the group directionally motivation when everyone is operating from a consistent understanding.

This mitigating action will disincentive the passive-aggressive stakeholder to play the game in the first place if they know that they will be acting-out in public view. To that end they will quickly be put on notice that everything they dispute will be part of the transparent process of building strong directional, understanding of the progressive toll gates of your campaign.

During implementation of a decision. Stay on high-alert for risk of the passive-aggressive personality designing disruption as you transition to an implemented state of your initiative or improvement project.

If an implementation or post-implementation deliverable is not fully met, the same people that demonstrate passive-aggressive traits present a risk of derailing the initiative ex-post-facto. Often delivering their dissent in justifiable-sounding clarity and straightforwardness

Consistent with encountering any legitimate, content-based disapproval of missed projected improvement, positive steps that you can take to diffuse the situation and keep the focus on getting the job done would be to:

  • Take immediate ownership of the failure
  • Do not make excuses
  • Lastly, consult a broader group as to what they believe the contributing factors to the performance gap to be, as well as what they see as important corrective actions. This will take the ‘Pied Piper’ role away from any single dissenter and allow a healthier sample size of affected stakeholders to diffuse the dissent and crowd-source the best solution. Inculcating the larger group in fact-finding will also help the organization to stay focused on the significance of the gains even if they end up being slightly behind projection or timeline.

 

My friends, I hope I have given you helpful tools to mitigate the risk of the passive-aggressive stakeholder so you don’t have to attend the up-hill battles they invite you to.  As always, until next we meet, I appreciate all you do to fill the hands that heal!

 

TH

 

Please visit my OutSideIn blog for a conversation on leadership decisiveness.

Stop by the N=5 Supply Chain Blog to participate in discussions on the value of disrupting the status quo.

 

TH-10x10-Slide-Share

Timothy Hagler is an experienced supply chain leader, with an ever-accelerating interest in earnestly connecting stakeholders with creative ideas to meet new economic realities for healthcare providers. Tim has enjoyed an excellent track record of achievement and advancement earned through demonstrated contribution to bottom-line results, employing strong solutions architecture, analytic and financial skills in challenging, multi-client environments. Tim and his lovely wife Kandy enjoy spending time at the beach in South Carolina. Tim’s hobbies include photography, American folk music, and writing about himself in the third person.

Trust me, the refrigerator light does go off.

frige-light.jpg

I know a number of supply chain leaders who manage great cost and productivity improvement campaigns, based on precise data-driven reconnaissance, but they are not someone who steps forward assertively when it is time to take on a role of the decisive leader who studies fast and decides fast. Frankly, as supply chain leaders we are often actively called on to be decisive, to make decisions quickly and confidently – it is a proficiency we are generally expected to possess. To some this skill comes naturally, but for others it feels to them like opening the refrigerator door abruptly but the little light just doesn’t come on right away. If you believe that great decisive leaders are born and not made, think again… There are definitely tactics that we can manage that will help our decision making speed and confidence improve, as well as maneuvers that will slow that refrigerator door light to the point that we will catch a chill while waiting in the darkness.

The light seems to speed up when you can quickly “apply to the COWS for a decision.” Nimbly list your Criteria and Options… apply Weight to the criteria, then Score the options, and pick the better result.

The light slows down when: you set the threshold for accuracy too high, you allow yourself too many choices, or your perception of risk is too high for impromptu decisions.

When the light is off and the door is closed your unattended-to blind spots will ultimately slow your response time simply because you have set yourself traps by: not communicating strategic direction to your likely collaborators or your team, not being clear about priorities, or if you have poorly communicated expectations to your team. But the real trap to slow you down is if you have delayed intervening and allowed poor performance for too long.

One more thought… I know it is counter-intuitive but if you only have two hours to cut fire wood, sharpen your axe for the first hour.

  • Take a deep breath and consider the future impact this decision could have.
  • Even though the clock is ticking always take the time to gather as much data as you can.
  • Allow some time to give credence to your instincts as well as your logic.

 

As always, until next we meet, I appreciate all you do to fill the hands that heal, and may the fridge shine it’s light immediately and brightly upon all your decisive moments!

TH

 

Please visit my OutSideIn blog for a discussion on situational awareness.

Stop by the N=5 Supply Chain Blog to participate in a discussion on great energy management initiatives.

 

 

TH-10x10-Slide-Share

Timothy Hagler is an experienced supply chain leader, with an ever-accelerating interest in earnestly connecting stakeholders with creative ideas to meet new economic realities for healthcare providers. Tim has enjoyed an excellent track record of achievement and advancement earned through demonstrated contribution to bottom-line results, employing strong solutions architecture, analytic and financial skills in challenging, multi-client environments. Tim and his lovely wife Kandy enjoy spending time at the beach in South Carolina. Tim’s hobbies include photography, American folk music, and writing about himself in the third person.

Just WHAT is going on here?

situational-awareness

Give yourself the best vantage point to enhance your situational awareness.

My friend Gene is rural Southern renaissance man. One of his many pursuits is bee keeping. Recently I was fortunate enough to observe a fascinating bee-keeping process Gene called ‘pageanting.’ He was combining two hives, and after taking all the bees out of the first hive, he placed a twig in front of the receiving hive. The new resident bees would land on the twig walk slowly along it, and go inside the door to the hive, after stopping briefly in front of it. This process of forcing bees to slowly access their new home by filing along a twig (as if on a pageant run way) encourages them to slow down and take stock of their surroundings, heightening their situational awareness and enhancing their ability to remember their way home when they leave the hive at a later time. Brilliant!

In a business leadership context, developing keen situational awareness is the sharpening of a substantial complementing skill. Imagine sitting down in a conference room and being able to take stock of the reaction of the room to the presentation material, knowing who is working on what high-impact initiatives and how the seating arrangement is building informal cliques within two or three closely seated colleagues, as well as the availability of white boards, markers or presentation materials in case you are asked to give an impromptu situational briefing on a project you are working on… If you have developed observational skills, you will be able use situational awareness to quickly coalesce the audience into a group of stakeholders with a shared interest (likely where their projects intersect with yours as a compliment to their own success) and move effortlessly into presenting a compelling update.

Like the bees, these observational skills that develop better situational awareness start with a little ‘pageanting.’ In my favorite military movies, it is called ‘checking your six,’ but military strategists refer to the higher functioning cognitive elements of situational awareness as the “OODA Loop.” A process of coalescing your Observations and environmental Orientation, to Decide what the relevant present conditions are and what your personal plan of Action should be.

 Observation: Staying in a relaxed-alert condition and gathering observational data on what’s happening in your immediate environment. Keep your focus broad, and look up from your smartphone, alert and attentive to the surroundings.

Orientation: This is where your observations lead you to actions. Monitor the outside environment related to key performance indicators, and predictive analytics. Know how the company and the teams are functioning so you can aggregate environmental and historical performance datum with forward-looking analytics into helpful situational human judgement.

Decide: Bring the cumulative observations and orientation data together to make better, scalable, and repeatable decisions. In an optimal business situation many decisions can be “pre-loaded” and anticipated. For my supply chain colleagues this is especially poignant with respect to inventory or procurement demand management and order fulfillment, as well during active supplier negotiations.

Action Coalescing all the observations, data, and projections into a solid baseline of information, and forming an immediate plan of action. Whether you need to act on it or not, you are ready and can immediately participate at a very high level when necessary. (for deeper review on OODA, Google – ‘military strategist John Boyd’).

To help develop the observational skills associated with keen situational awareness, practice asking yourself these questions…

  • What’s going on here?
  • What’s the general mood?
  • What’s the “normal” activity that I should expect?
  • How do most people behave here most of the time?
  • What would cause someone or something to stand out?  (The art of Manliness Blog February 5, 2015 http://www.artofmanliness.com)

 

As always, until next we meet, ‘check your six’, and I appreciate all you do to fill the hands that heal!

TH

 

Please visit my OutSideIn blog for a discussion on developing a utilization index to help manage effective cost avoidance, and how the Internet of Things is delivering an unprecedented interconnectedness.

Stop by the N=5 Supply Chain Blog to participate in discussions on, CCJR – 5 paths Supply Chain can take to support success, demonstrating fiscal accountability, and how to stop doing stupid stuff.

Thank you

 

TH-10x10-Slide-Share

Timothy Hagler is an experienced supply chain leader, with an ever-accelerating interest in earnestly connecting stakeholders with creative ideas to meet new economic realities for healthcare providers. Tim has enjoyed an excellent track record of achievement and advancement earned through demonstrated contribution to bottom-line results, employing strong solutions architecture, analytic and financial skills in challenging, multi-client environments. Tim and his lovely wife Kandy enjoy spending time at the beach in South Carolina. Tim’s hobbies include photography, American folk music, and writing about himself in the third person.

AVOID this advice at all COSTS!

cost-avoidance.jpg

The comment comes up regularly… “cost avoidance isn’t actual savings…” In its most rudimentary form the statement appears true, but it is a disingenuous dismissal of the competent and necessary work effort needed to avoid unnecessary inclusion of premium products or utilization. This effort requires skillful clinical collaborations and physician engagement and we need to celebrate our successes in keeping unnecessary costs competently out of the system or we risk the deleterious effect of discounting the effective efforts of our clinical stakeholders and value analysis professionals.

Instead we can positively communicate the more genuine value of managing proposed product and utilization changes expressed as managing medical supply inflation relative to a simple marketplace index… Enter the Clinical Utilization Acceleration Index.

Background

To get some context, lets quickly look at a simple example of how medical supply products behave during budget planning, specifically in terms of inflation.

In Example 1, we have the customary 12-month historical medical supply run rate (in our hypothetical example $100M). Also shaded in blue, are the inflation drivers. Same store growth is the planned change when a new service is opened or when a current service is tooled up to accept increased volume. The management challenge is the “budget plug” given to supply chain as an expense reduction target. Often applied to top-line supply expense as a negative value to inflation. Benchmark inflation can be driven by various forward-looking reconnaissance such as annual budget planner white papers published by the GPOs, AHRMM, HFMA, or simply historical inflation to the expense line as known to the organization budget analysts. ‘Changes in clinical utilization’ is an estimation based on historical experience for organic drifts in product utilization, and changes in unit price that reflect known contract price escalators.

In the example we see a hypothetical budget year planned out to reflect the behaviors of these inflationary (or contra-inflationary) elements. Planned, contingent, and experiential behaviors are accented for and can lend great transparency to value analysis teams working diligently to help manage appropriate cost. These cost behaviors can be the focus of data mining to develop a compelling data driven story of how we successfully manage the medical supply budget line.

Example-1.jpg

Evolving the Clinical Utilization Acceleration Index

First collect at least 100 items to participate in the index. Select top 50 SKUs from Ortho, Spine, and CRM. Then choose 25 SKUs from Suture, Endomechanical, Trocar, and adhesive products. Finally, 25 commodity medical products, and any other medical supply for which there is strategic interest and 12 months of mature utilization.

With the list of index-participating SKUs you will determine a baseline analysis of the total 12-month utilization from the date that the budget was finalized, then analyze to the monthly average. This will give you the baseline data. Each month the amount the new utilizations shows to be greater or less than the average is expressed a percentage and becomes the new Clinical Utilization Acceleration Index. This index will be affected by changes in organic baseline utilization as well as the planned same store growth, and can help describe how these factors contribute to inflation.

In Example 2 we see a Q1 trend to the aggregate Clinical Utilization Acceleration Index expressed as 6%. Our “normal” aggregate rate has a lower control limit of 2.4% for estimated clinical utilization acceleration inflation, and 12.4% upper control limit with the additive effect of the planned same store growth. In this example the supply chain leader communicating the trend would make note of what the significant driver of the sharp increase was… Perhaps it was the planned growth of supplying a new service location.

Example-2.jpg

Value analysis teams now have a communications alternative that better describes what has been traditionally called “cost avoidance” and quickly dismissed. If you have logged an aggregate net savings against budget run rate of $400,000 and have declined $100,000 in new product requests, you are communicating a “savings of $400k to budget, and other favorable contribution to the Clinical Utilization Acceleration Index of $100k.”

 

Example-3.jpg

In Example 3 we see a communication chart where the index is behaving within expected limits, and although the aggregate forward-looking trend appears unfavorable, predictive budget analytics still indicate the performance will maintain within upper and lower control limits.

The next months will either start to correct the trend line or the management challenge will need to step up to be a more aggressive corrective influence on the index.

With the Clinical Utilization Acceleration Index, communication about avoiding incremental new expense is on a positive note and supportive of the heavy lift that stakeholders in clinical value management undertakes when clinicians are asked to review their peers as supplicants to the new product request process. Contribution to favorable performance against a utilization index is much more compelling to future collaboration than dismissing work as ‘cost avoidance.’

I hope this advice inspired you to work through setting up an index approach to communicating the effective work your teams and stakeholders do to keep medical supply expenses in check and behaving as planned for in the budget process.

As always, until next we meet, I appreciate all you do to fill the hands that heal!

TH

 

Please visit my OutSideIn blog for a discussion on how the Internet of Things is delivering an unprecedented interconnectedness, and how healthcare Supply Chain leaders better get comfortable with it.

Stop by the N=5 Supply Chain Blog to participate in discussions on, CCJR – 5 paths Supply Chain can take to support success, demonstrating fiscal accountability, and how to stop doing stupid stuff.

Thank you

The Velveteen Internet of Things – Healthcare Supply Chain leaders better get comfortable with new hyperconnectivity “made real!”

Rabbit.jpg

I have always enjoyed the various business parables drawn from the children’s book written by Margery Williams “The Velveteen Rabbit.” In this story a stuffed rabbit sewn from velveteen is given as a Christmas present to a small boy. The story focuses on the stuffed rabbit his desire to “become real,” through the love of his owner.

So we have birthed a new parable… “The velveteen internet of things (IoT).” We have so loved the potential and the discourse on IoT we have “made it real!” As supply chain professionals we need a current working understanding of the IoT and how it is demanding new skills and new ways to optimize critical disruptive attributes to actually assist us in driving new economic utility.

How did we get here? Hyperconnectivity is the accelerating interconnectedness between people, objects, and technology. The progression of hyperconnectivity is the progressive development of three epochs of technological advancement:

  1. The Internet – the great equalizer – making it possible for the e-collective of all computers to connect on through a solitary platform.
  2. Mobile tech grew (and continues to grow) exponentially, which accelerates hyperconnectivity worldwide.
  3. The Internet of Things is the oncoming epoch of advancement, and is delivering an unprecedented interconnectedness.

(ref: The Economist Intelligence Unit: Hyperconnected Organisations)

So how do supply chain leaders find a comfort zone with the IoT 3rd epoch? By finding the value proposition in interconnectedness and making sure the organization is optimizing it.

New value levels of support for diagnostic and therapeutic capital equipment: Devices can allow service techs to run precision remote diagnostics, and the remote OEM tech can then remote in to the hands-on facility clinical engineer with root cause to failure as well as instructions for replacing the defective part or shipping in repair parts, boards, and “hero kits.” Also downtime and meantime between failure service expectations can be spelled out with better value and benefit for the user. Recent industry trends show that connected Varian linear accelerators are seeing mean time to repair cut in half, and service costs cut by $2000 for each problem solved remotely, with a 20% reduction in OEM tech dispatches. Elekta is also reports significant cost improvements from their ability to perform “over the shoulder” OEM support.

(Ref: http//wwwforbescom/sites/salesforce////nternet­things­revolutionizing­health­care)

Value from predictive supply replenishment: From MRI helium, to lab equipment reagents, and ultimately consumable replenishment through consumable “bundles” predetermined by utilization of a “trigger” asset. This is accomplished through treatment planning and diagnostic intervention software interfacing with machine schedules, calibrations, and in-machine product waste assessments to further talk to inventory control and replenishment modules in the ERP/MMIS system. Connect the value stream further through upstream supplier channels as well as triggers for waste stream and reverse supply chain work activity and we have end-to-end hyperconectedness that we can use to focus elimination of duplicative work in the most beneficial areas. Even hospital beds can aid in triggering a pull signal for linens, incontinence and convenience products, tubing, and circulatory control products as they interface with EMR, and the EMR to MMIS.

Device Utilization: A connected diagnostic device can provide specific and discrete data sets to help normalize device utilization relative to patient assignment and managing peak / off-peak equipment times. Machine capabilities can be scheduled proactively with treatment planning and EMR systems and give a new data-driven tool to service line leaders and supply chain equipment planners in selecting the right functionality for equipment.

High-value discussions to have with your Chief Information Officer, Clinical Engineering Leader, and Decision Support team. These discussions will help you keep pace with the proliferation of healthcare IoT as it affects your organization.

  • Understand the current management maturity of the ERP and EMR.
  • Become familiar with your organization’s in-memory and cloud computing strategy as well as the data warehousing and management plans.
  • Talk through the practicality of extended digital capabilities through social media, mobility, “bring your own device” approaches, and analytics.
  • Bring up the organizational appetite for big data… How much is helpful, and how much is too much for physicians and decision makers.
  • Discuss the value-driving insights that supply chain is hungry for from analytics, and how those capabilities can be built into the data management plan.
  • Understand the rate limiting issues that are necessary to contend with such as data mass diffusion and overload, cyber security risk concerns that the interface of uneven platforms delivers (including business continuity for cyber interruption to patient care), and how the organization applies an ROI to the benefits of IoT and hyperconnectivity.
  • And never be hesitant to open discussions and building a culture of data-driven, high value decision making.

 

I hope you are inspired to find the value proposition to the hyperconnected silver lining of the IoT cloud (pun intended) …  As Margery Williams wrote in The Velveteen Rabbit “Once you are real you can’t become unreal again. It lasts for always.” I think the IoT is here stay.
Until next we meet, I appreciate all you do to fill the hands that heal!

TH

 

Please visit my N=5 Supply Chain Blog to participate in discussions on, demonstrating fiscal accountability, how to stop doing stupid stuff, and effective ways to manage purchased services expense.

 

The OutSideIn blog will help you to get started planning a high-value approach to multi-channel reverse supply chain and how to cope with the minor defeats that come with the wins in life.

Thank you

 

 

TH-10x10-Slide-Share

Timothy Hagler is an experienced supply chain leader, with an ever-accelerating interest in earnestly connecting stakeholders with creative ideas to meet new economic realities for healthcare providers. Tim has enjoyed an excellent track record of achievement and advancement earned through demonstrated contribution to bottom-line results, employing strong solutions architecture, analytic and financial skills in challenging, multi-client environments. Tim and his lovely wife Kandy enjoy spending time at the beach in South Carolina. Tim’s hobbies include photography, American folk music, and writing about himself in the third person.

No Undefeated Season

WARNING…  For those who have highly sensitive sports metaphor allergies, please take appropriate precautions before reading further!

Seahawks-Fan

I am an NFL football fan, and to be more specific I am an unashamed Seattle Seahawks football fan.  My allegiance as a “Seahawks 12th man” is significant since I live in South Carolina, and not be a Panthers or a Falcons fan you have to have the ability to really take a shot on the chin once in a while. As a Seahawks fan, I have learned two things. 1) (thankfully) I do not have a glass jaw, 2) I have to come to grips with the fact that the Seattle team does not lend itself well to an undefeated season. There is always that first regular season game that delivers us a Seahawks loss and I will have to accept the idea that we may go to the NFC Championship or even the Superbowl by the skin of our teeth. I guess there is no free lunch for the “12th man.”

Suffice it to say, in my more “practical life” leading healthcare supply chain teams, (as in Seahawks fandom) there are often mistakes and there’s always time to wrestle with the old “win some and learn some.”

I have learned that I can survive not having an undefeated season and even making it to the playoffs as a wild card if I accept some guidelines for what I am tolerant of making mistakes at and what I simply will not harbor as any loss as acceptable. Here are my top three beatitudes for making mistakes, winning, and losing, you will undoubtedly have more – and better guidelines of your own, and I would love to hear about them.

 

1: Be INTOLERANT of making mistakes defending the status quo, but accept mistakes made in the course of investing in the future.

2: Never “settle” for the sake of being expedient or good enough. Do however; practice being accepting of strategic compromise for a better end-to-end solution, especially if the compromise ultimately reduces duplicative work streams, clinical variation, low quality product, or all-in cost.

3: Don’t waste ANY time, energy, or organizational capital on detracting from – or building a case against a peer. Do invest some of your time and energy doing one kind thing for a half-dozen or so colleagues every day.

 

These beatitudes can be summed up in “know what the potential for the future holds, care about making the today’s potential tomorrow’s reality, and ease the way for those who play a role in bringing it all to fruition… And in that pursuit the ‘WIN some’ is so substantial that you can happily accept the ‘lose some’ as the price of success.”

Well, the Seahawks have vowed to work on their offensive line over the summer… so for now – next season is shaping to up to be 16 and 0! Ok, probably not… But as of today, we have as good a shot at conference champion as anyone else.

A special note to my healthcare supply chain colleagues… Until next we meet, I appreciate all you do to fill the hands that heal!

To all: may the some you win, be truly outstanding; and the some you lose summed up as brief learning moments along the journey to all success!

TH

 

Please visit my N=5 Supply Chain Blog to participate in discussions on, demonstrating fiscal accountability, how to stop doing stupid stuff, and effective ways to manage purchased services expense.

 

The OutSideIn blog will help you to get started planning a high-value approach to multi-channel reverse supply chain.

Thank you

 

TH-10x10-Slide-Share

Timothy Hagler is an experienced supply chain leader, with an ever-accelerating interest in earnestly connecting stakeholders with creative ideas to meet new economic realities for healthcare providers. Tim has enjoyed an excellent track record of achievement and advancement earned through demonstrated contribution to bottom-line results, employing strong solutions architecture, analytic and financial skills in challenging, multi-client environments. Tim and his lovely wife Kandy enjoy spending time at the beach in South Carolina. Tim’s hobbies include photography, American folk music, and writing about himself in the third person.

Multi-Channel, Reverse Supply Chain

Runner.jpg

There is a story we tell in the South, I have a suspicion that it actually exists in some colloquial form in other active story-telling cultures as well. In this yarn Billy Bob is telling Harlan that their friend Scooter has been training for a marathon by running five miles a day. Harlan asks “how long has Scooter been training?” Billy Bob replies “not rightly certain, but I would cipher that ‘bout five days makes sense.” “Why would you say that?” Harlan further inquired. “Well…” starts Billy Bob “… Scooter has been runnin’ five miles a day, and he is 25 five miles from home so far… That comes out to five days.”

Such is the approach we take when we only strategically manage the forward supply chain and leave the reverse supply chain to random, as-required, reactive activities. We run our supply chain in one direction and don’t seem to get back home effectively. This ‘one-way’ service provision also leaves a tremendous amount of value on the table in the process. Multi-channel, reverse supply chain optimization strategy is a great value-added “outside-in” approach to review as healthcare delivery network supply chain organizations haven’t come into their full maturity in reference to true end-to-end supply chain planning and management. Let’s take a rudimentary look at this high-impact service and how it can augment the value proposition of healthcare supply chain.

To translate reverse supply chain activity into economic utility or practical revenue we are essentially managing the disposition of assets in discrete ‘waste-to-salvage value’ channels.

Channel 1: Repair / Refurbish / Re-manufacture.

The selling repaired, refurbished, or re-manufactured products and equipment into the open market is one avenue of direct revenue, but also consider the value utility of uninstalled parts and materials that are salvaged and used within the original enterprise.

Channel 2: Auction.

Auction sites pass through proceeds after taking a proportional “discount” from the sale.

Channel 3: Scrap and salvage.

Third-party scrap dealers, and recycling plants pay a nominal rate for acquiring scrap.

Channel 4: Redistribution.

Items that are discontinued, over filled, or over-acquired due to minimum order quantities or generally slow utilization can be redirected to other areas where they will be consumed rather that wasted. Items can be redistributed with a discounted market rate, or at a net-book value of the asset. When some items attract greater disposal cost than their acquisition cost they can be a good candidate for redistribution back through the forward supply chain. Good examples of these items are pallets, delivery containers, and CSR wrap. There is often new forward supply chain cost introduced when an organization redistrubtes goods and must be part of the equation when analyzing the utility of redistribution.

Channel 5: Reusable and reposable items.

When reusable devices are considered the preference to disposable items, they require a reverse supply chain and an internal redistribution system that often comes with considerable direct expense, but the savings opportunity is often more substantial than the cost of operations. Reposable items are items that can be reprocessed a certain number of times then must be discarded as waste, often reclaimed by the using facility and sent to a third-party reprocesser.

Channel 6: Donation.

The revenue stream for donation is tax deduction.

Channel 7: Energy.

Reverse supply chain from energy generation can come from waste or from over production (co-generation).  Organic waste can be converted into renewable energy and is a good way to dispose of returned, or expired food products. The value proposition is the monetary equivalent of the energy generated or the utility cost that can be offset compared with the transportation and handling expense. There will be waste-to-energy activity cost to consider but it is often diminimus compared to the return and the net is well worth considering.  Cogeneration for topline plant power station or in the case of micro turbines requires in depth financial and regulatory analysis, but given the correct conditions the upfront and operating investments can often benefit from a truncated ROI. Co-gen and harvesting the waste-to-energy stream are often not considered in the strict purview of reverse supply chain planning but the concept of taking a spent forward inventory (of electricity, steam, or food stuff) and returning it through the value chain as new inventory is governed by the same economic principles. Supply Chain can still play a helpful sponsoring role of an effective energy management campaign.

Channel 8: Returns and tax value loss.

A protracted return-for-credit cycle or a fully unclaimed return will often not effectively be able to assess the trade-related taxes paid against acquired goods. This is more devastating in a scenario where there are import tax issues, and some health systems are actively endeavoring to disintermediate offshore distribution, but even for traditional procurement there is a related issue where a little unclaimed tax return here and there builds up over time, and easily escapes the radar. Solid strategies around returns, zero-return policies (where credit is given with pre-negotiated salvage guidelines attached to the contract terms in lieu of product return), and instant credits should be developed and part of the formal relationship with suppliers.

Channel 9: Disposal.

Landfill disposal is a bona fide option, but should be considered the last resort.

Management of the multi-channel reverse supply chain:

In the managing of the reverse supply chain time is not our friend. The value proposition we are building on is based on an industry assumption that +/- 45% of an assets value erodes with ineffective reverse supply chain management… Most of that is simply lost to the ravages of time. Asset depreciated value, general condition, short dated inventory, unrecoverable tax value, and lost or unrecoverable product. Effective practitioners of reverse supply chain can stem the tide of that loss by planning for effective salvage ahead of time, reducing planning errors that create over supply, and where assets are legitimately under-utilized they are effectively converted to value with readily accessible programs

Besides the skillful, timely exercise of reversing the logistic flow, careful focus needs to be applied to the development and exploitation of secondary markets, as well as an organizational emphasis on the physical/fiscal analysis of what stasis asset is available, what the cost is for salvage/recovery of the item(s) and the processing and/or redistributing, with distinct review of how sophisticated the reverse logistics architecture will need to be to recover value from each channel.

These are all deliberate and competent considerations that deserve to be approached with the same rigor and purpose that the forward supply chain enjoys.

So before Scooter gets too far from home, consider the value of directed effort at some or all of the channels of reverse supply chain. And until next time… I appreciate all that you do to fill the hands heal!

TH

Also, see the N=5 Blog… “Stop Doing Stupid Stuff!”

Rare Hare

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My dad once told me that if I wanted to catch a “one-of-a-kind” rabbit, UNIQUE up on him…

The rabbit joke resonated with me, and I began calling certain events a “rare hare.” A rare hare was a singularly unique event among the very common place, an event that stood out as remarkable among the unremarkable. The iconic example of course being that rabbits are plentiful and they multiply very quickly and in general they’re all the same. That is of course until you find the rare hare.

When we are launching an idea, or an initiative, or planning out a microbrand strategy to connect our stakeholders with a great idea, remember to show that one ‘rare hare’ in among all the common white rabbits. When it is important to connect great people with great ideas we need to make sure that we are introducing the right concepts to get people talking and connecting with each other in shared purpose.

I wish you all the best in unique-ing up on that one rare hare, and until next time… thank you for all that you’re doing to fill the hands that heal.

TH

Please click here to view the “Rare Hare” video on my YouTube Channel. 

 

Tribal Supply Chain Leadership

TribeMy father’s family was half Choctaw and half Cherokee. I never really identified strongly with the ethnicity of my nuclear family when I was a kid, I always tried to tell people that we were “Mexican.” Mexico is a place… Mexicans are a people… They have Mexican accents, eat Mexican food, play Mexican music. And THAT was simple for me to communicate. My dad “looked” Mexican… Why not?

That was me… My sister, Cathy, was WAAAAAAAAAY into the whole American native identity, Dawes Roll, native language, all the way to our native ritual names.

In later years, Cathy told me about our genetics being kind of – well – “messy” and she was disappointed as she tested, researched, and discovered the details. It seems our genetics on our grandmother’s side (Choctaw) was actually heavily Euro influenced… On our grandfather was black Cherokee. A few generations ago some African-decent  slaves probably made an escape into Cherokee tribal areas and integrated with them. In those days it was hard for slave owners to tell Africans from American Natives so the integration wasn’t all that difficult.

To help explain my sister’s disappointment, this was in the 1990’s and the Cherokee Nation was dis-enrolling black Cherokees. Yet – for as disappointed in this “complication” as Cathy might have been, I was finally energized. I was just granted instant connection with Jimi Hendrix, Eartha Kitt, and Rosa Parks! Hey. If you are related to Cat Woman you gotta love it, right! Cathy didn’t like her tribal rights to be placed in question by enrollment roadblocks, but I was finally excited about the “tribe.”

By the way – To my sister’s relief, in 2007 the Cherokee Nation reinstated the “Freedmen” as they were called, and the tribe was whole again.

At long last I experienced the sense of tribal connection – albeit more complex than the simpler Mexican heritage I “spun” for us as a child – the actual blood connection and this “messy” part of American history was energizing to me.

In my supply chain leadership career, I have applied that experience as I often coalesced a “tribe” to connect people to an idea.  Seth Godin (marketing guru, author, speaker) points out that the only things you need for a tribe is a shared interest and a way to communicate. He further teaches that to lead the tribe you simply need something to believe in, paint a picture of the future within the context of the tribal belief, and then endeavor to take the tribe there.

My OutSideIn concept of the day is – the power of the tribe. A marketing concept – directly applicable to supply chain leadership when multiple priorities compete for our attention as well as the attention of our critical business partners and the stakeholder groups for our initiatives.

One last quote from Mr. Godin “In a battle between two ideas, the best one doesn’t necessarily win. No, the idea that wins is the one with the most fearless heretic behind it.”

So when you are advancing an initiative with a solid microbrand campaign strategy, bring together your tribe, fearlessly point to the future, and take them there. The war paint is optional…

Until we meet again – I admire you for answering the call to fill the hands that heal.

TH